8 June, 20:01

# The following information was used by the Long Corporation to prepare a cash budget for April: Cash balance beginning of April \$ 16,000 Expected cash receipts in April 272,000 Sales salaries paid 62,000 Material purchases (all cash) 94,000 Depreciation charges 44,000 Other expenses (all cash) 96,000 What is the budgeted ending cash balance in April?

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Answers (1)
1. 8 June, 22:39
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The budgeted ending balance of cash for the month of April is \$36,000

Explanation:

Ending balance of cash = Cash balance at beginning of April + Expected cash receipt - (Salary paid + Material purchases + Other expenses)

= \$16,000 + \$272,000 - (\$62,000 + \$94,000 + \$96,000)

= \$288,000 - \$252,000

= \$36,000

Note: Depreciation is non - cash expense so it will not be considered while computing the cash balance at the end of the month.
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